Gfinity well-placed to take advantage of the eSports boom

eSports are tipped to generate more than £1bn a year in a global revenue by 2020, while audience numbers are set to go through the roof too

Gfinity organises eSports tournaments which are watched by thousands of fans either in the arena or online

AIM-listed Gfinity Plc (LON:GFIN) has been in the eSports space for a little while now, but it's only over the past couple of years that professional video gaming has really caught the public's attention, as well as that of some big tech players such as Microsoft Corporation (NASDAQ:MSFT).

Only recently, Newzoo – an eSports analytics firm – estimated that eSports will generate more than £1bn in global revenue by 2020, while its audience will double to nearly 600mln people in the same timeframe.

“It has the potential to become one of the top five sports in the world,” said Newzoo’s Peter Warman.

eSports reportedly generated £400mln in revenue around the world last year, reaching a global audience of about 320mln people.

Even major European football clubs are jumping on the bandwagon.

French outfit Paris Saint-Germain moved into gaming last October and signed three of the world’s leading gamers to its new franchise.

Closer to home, Manchester City and West Ham have already brought in FIFA video gamers to represent their respective clubs, although no British club has set up a dedicated eSports as of yet.

Big name partners

Several household names have put their name to Gfinity’s events recently.

Today it was revealed that US tech titan Microsoft has named the AIM-listed firm as its official global tournament partner for the Forza Racing Championship on the Xbox, with Gfinity to provide the platform that will host and broadcast the gaming competition, both online and offline.

Microsoft had already selected Gfinity to be its event partner for the Halo World Championships.

Gfinity hosted the online qualifiers for the European and Latin American part of the Halo tournament at the end of January, while it also held two more events in London and Mexico City last month to determine which gamers made it through to the finals.

Meanwhile, fellow technology giant HP Inc (NYSE:HPQ) also teamed up with the AIM-quoted group at last year’s EGX gaming exhibition – the largest of its kind in the UK.

HP has also just become the first official partner of Gifinity’s inaugural Gfinity Elite Series tournament, which will see the competing teams kitted out with HP’s latest high performance laptops and other gaming products.

On top of that, the computer game tournaments organiser entered into a strategic partnership with MediaCom, one of the world’s leading media agencies.

The two are working together to identify and develop innovative partnership opportunities for potential sponsors within the e-sports environment, and the partnership is expected to enable Gfinity to reel in sponsorship deals and publicise its brand.

Further evidence that eSports are becoming mainstream came in the form of news that two major British broadcasters are covering Gfinity's Elite Series, which is a tournament over nine weeks hosted in the company's Esports Arena in London. First BBC Three got on board, as it started showing games and exclusive short-form content from the tournament on 28 July, and then a few days later pay TV outfit BT Sport started coverage.

Recent results show continued progress

In its 2016 results published last November, Gfinity said it had been a highly successful year as it reported a 158% rise in revenues.

Gfinity generated £1.45mln of revenue in the twelve months ended 30 June 2016, up from £560,000 last year, and its operating loss narrowed by 12% to £3.2mln.

The overall loss for the year amounted to £3.03mln, compared to £3.58mln the year before, while the company ended the financial year with £83,000 of cash.

Speaking at the time of the results, Neville Upton, Gfinity chief executive, said: “We continued to deliver on our strategy to become one of the world's leading promoters of eSports competitions and content.

“The launch of new products, such as our Tournament Builder application, strengthened our unique position of providing a complete end-to-end eSports solution, while partnerships with publishers, including EA, Microsoft and Super Evil Megacorp, demonstrate Gfinity's growing reputation within the eSports sector.”

In a recent note, Oliver Knott, analyst at broker N+1 Singer said: “We see Gfinity as the primary way for UK investors to gain exposure to the eSports market and, with consistent execution, see potential for the group to extract significant value from its unique position within this US$1bn+ industry.”

He added: “Execution remains key, but we believe the group is as well placed today as it has been at any time since IPO. We continue to monitor progress closely.”

As for how things have been progressing in the first six months of the current fiscal year, we should know more on that at some point in the coming weeks.

Gfinity is a world leader within the fast growing eSports sector. Founded in 2012, the London-based business enjoys strong relationships with game publishers, players and the wider eSports community and has already built a strong reputation for delivering high quality competitions, both on-line and off-line, and producing industry leading eSports broadcasts. Gfinity’s events in 2015 attracted almost 60 million views, from an attractive and highly targeted demographic and the Company expects to grow revenues significantly over the next two years through the commercial exploitation of the rights attached to these events and through helping third parties utilize the eSports phenomenon to reach their target market.

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